Analyze This: 'Blue Laws'

By
April 4, 2008 00:58

Selling hametz - and doing business with Iran.

4 minute read.



On Thursday, the Knesset passed a law banning local financial institutions from investing in firms that do business in Iran, and the Jerusalem Municipal Court published its interpretation of a law dealing with the business of hametz (leavened) products over the Pessah holiday. What's the connection between the two, other than timing? Well, one could argue that those who break the first law are contributing to the possible physical destruction of the Jewish State, and those who violate the second are contributing to the destruction of the state's Jewish character. But while a majority of Israelis would likely endorse the former view, it is largely the Orthodox community, and especially its rabbinical and political leadership, that most strongly endorses the latter proposition. What inarguably links these two laws, though, is not the specifics of the types of business they forbid, nor their respective consequences. The similarity comes in the spirit of their intent, and even more crucially, their enforcement. To understand why requires a little background about their origins. First, consider the Pessah hametz law. Late Wednesday, a local court ruled that the Jerusalem Municipality had acted improperly last year in seeking to penalize four eateries and a minimarket in the capital for selling bread products over the holidays. What the court found was that the city had too broadly and severely interpreted the law, which specifically forbids not the selling of hametz over Pessah, but its display in a public place. To forbid its sale completely would not only be impossible to enforce in a city that is one-third Arab and attracts tens of thousands of non-Jewish tourists, but unfair to the secular Jewish majority's right to choose its degree of religious observance. There is a well-known English expression for this type of ordinance: "blue laws," designed to enforce certain common moral or religious standards. Though the origin of the expression is in dispute, it stems from the laws first passed by the Puritan settlers of New England in the 1700s, originally intended to prohibit various types of activities on Sunday, the Christian Sabbath - a practiced derived from Jewish religious law regarding Shabbat and holidays such as Pessah. One characteristic of blue laws is that because they deal primarily with the morality of personal behavior, they are enforced in varying degrees by local authorities. Blue laws regulating the times and types of business permissible on Sunday are still taken seriously in parts of the US. Other blue laws that date back centuries remain on the books in several states - such as those making adultery a punishable crime - but rarely, if ever, are enforced. Israel's hametz law was designed to preserve the spirit of Pessah in the public sphere, ruled the court yesterday, but not to enforce the letter of halachic law on every single Jewish Israeli. Although this issue will no doubt continue to be argued in the judicial system and Knesset, the court's judgment was very much in the compromise spirit of modern democratic societies that seek to preserve the moral spirit of blue laws, while keeping them in the realm of individual liberty, and even more important, pragmatic enforcement. What can any of this have to do with the Knesset's passage Thursday of a law forbidding Israeli investment in companies abroad which do business in Iran? The background here is that this piece of legislation was proposed by Likud leader Binyamin Netanyahu, who commendably has been spearheading a campaign abroad, primarily in the US, to get public financial institutions to halt further investment in Iran until it complies with international restrictions on its nuclear development program. One problem that Netanyahu and other advocates of such measures encountered in this invaluable campaign, especially in dealing with state pension funds that invest billions in companies doing major business with Teheran, is that many Israeli financial institutions were investing in the same firms. This is the problem the new law is intended to address. Although this is also a regulation that seeks to restrict business dealings and has an undeniable moral underpinning, it obviously has a somewhat more urgent practical purpose than the hametz law - namely, to prevent Mahmoud Ahmadinejad from getting the means to one day fulfill his dream of wiping Israel off the map. Yet in another way, this is very much a blue law, in the sense that it would be almost impossible to enforce absolutely, or even close to what it is intended. Why? Because of the complex nature of international finance today, in which money in the form of investment is extremely fungible, with investment funds investing in other investing funds, and most major multi-national firms of the type doing business in Iran having numerous subsidiaries scattered around the globe. A good example is the German technology giant Siemens, which has subsidiary companies both in Israel and Iran. Although last year it announced it would seek no new business with Teheran, it is still fulfilling major infrastructure contracts in Iran while continuing to invest in Israeli hi-tech. It's likely only the most blatant and serious violators of this restriction will find themselves facing punishment. But what's really important about the new Iran-investment law is less its practical application - Israel is not one of the world's financial powerhouses - but the message it sends to the rest of the world about the seriousness with which Israel takes this threat, and the necessity to avoid the charge of hypocrisy when it asks other nations and states to pass similar laws. To legally prevent every Israeli Jew from selling hametz over Pessah would move this country in the direction of fundamentalist Iran; to legally permit any Israeli at this point to do business directly or indirectly with Iran would move this country in the direction of its possible destruction. And it is up to those whom we entrust with drawing up our laws, both those that affect individuals and those that impact on entire nations, to see they are wisely interpreted and enforced.


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